The Australian founder of New York-based Droga5,
David Droga
, has spoken out for the first time since last month’s $34 billion merger of communications giants, Publicis and Omnicom. He has predicted a global exodus of top talent from the world’s biggest marketing services company as a $500 million efficiency program takes shape.

Fresh from his own $225 million deal in which Mr Droga sold a 49 per cent stake in Droga5 last month to the largest Hollywood, TV and music talent management firm William Morris Endeavour (WME), Mr Droga predicted a wave of new start-ups around the globe resulting from the merged Publicis Omnicom Group (POG).

Already top creatives in the sprawling POG are fearing widespread cuts to staff numbers and conflicting blue chip client relationships among the international creative, media buying and digital agency networks controlled by POG. In Australia they include Saatchi & Saatchi, Clemenger BBDO, Whybin\TBWA, OMD, Starcom MediaVest Group and Leo Burnett.

Sweeping impact here

Local executives across these networks are adamant there will be little impact here from the merger but executives in the global management ranks of the two groups are quietly acknowledging the sweeping impact that the $500 million efficiency program is likely to have beyond back-end office synergies.

Mr Droga was previously the worldwide creative director of Paris-based Publicis and a one-time golden boy of Publicis chairman and CEO,
Maurice Levy
, before breaking away to start Droga5 in New York in 2007. Mr Levy and Publicis bankrolled one of Mr Droga’s ventures before they pulled out in 2008 because of the GFC.

“We are back in the era of the entrepreneurs," Mr Droga told The Australian Financial Review. “You’ll see creative people setting up as a backlash to the industry being run by people who are not creatives."

Mr Droga is one of the most-awarded advertising executives globally and is a director of the New Museum of Contemporary Art in New York, among other achievements.

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“There are a huge number of [advertiser] clients that do want middle-of-the-road output and for it to be highly-organised but that is more about the linear thinkers than the lateral thinkers," he said. “Usually for the brands that make a difference, creativity is the gamechanger. That is true of society, in advertising and in life. It’s the daydreamers that change things. It is the practical people that make it happen but you need the daydreamers, the storytellers and the creative people for anything interesting to happen."

Cost-cutting

Mr Droga said creative talent and quality was likely to be squeezed as the number crunchers in the Publicis and Omnicom group seek to impress investors with cost-cutting and improved profitability from the merged entity.

“A lot of people are going to be squeezed out and a lot won’t be able to sit on their hands," Mr Droga said.“Some will be squeezed and some won’t fit the culture so you’ve got to think reinvention is going to happen. It’s happening naturally anyway. There are certain things that scale can give you but eventually what does Martin [Sorrell] do, buy IPG?"

Martin Sorrell
is the CEO of London-based WPP, the biggest international communications company until the POG merger. WPP has led the worldwide consolidation of the advertising and media agency industry after departing Saatchi & Saatchi as finance director and acquiring the listed British shelf company WPP in the 1980s.

Last month’s POG deal, which has still to obtain regulatory approval in some countries, has triggered intense speculation that WPP will seek to merge or acquire one of the two remaining international adland aggregators, New York-based IPG, which owns McCann and media agencies such as UM and Initiative, and the Paris-based Havas. But Mr Droga said the communications industry was historically slow to innovate and was “lazy", the opposite to what was needed in today’s fast-changing technology and consumer environment.

“Unless they start to put a huge amount of money into research and development to try and change what they are doing, [POG] is just going to be a bigger version of what they already are. I’m not saying we have the silver bullet but we are trying to throw ourselves into unchartered waters and find some new ways of doing things in places where clients are craving new thinking and output."